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Tuesday, November 25, 2008

Coralville Courier: IEM within less than half percentage point in presidential race prediction

With all the votes counted, the Iowa Electronic Markets predicted thefinal vote count in this year's presidential election to within a halfpercentage point. Prices on the IEM's Vote Share Market predicted thatBarack Obama would receive 53.55 percent of the two-party presidentialpopular vote, and John McCain would receive 46.45. After the ballotswere counted, Obama received 53.2 percent of the vote, and McCainreceived 46.8 percent, leaving an average error per contract of only.3 percent. The average absolute error by public opinion polls,meanwhile, was 1.2 percent. But Tom Rietz, a finance professor at theUniversity of Iowa's Tippie College of Business and a founder of theIEM, said the IEM traders saw Obama's win even before anyone knew whothe two parties' nominees would be.